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Introduction

India, now the world’s third-largest solar energy producer, aims to source 50% of its power from non-fossil fuels by 2030. Solar energy drives this transition, but high costs, limited adoption, and global competition challenge its long-term sustainability.

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Factors Contributing to the Growth of India’s Solar Sector

• Policy Commitment to Clean Energy Transition: India’s clean energy drive has boosted solar investments and partnerships, targeting 280 GW within its 500 GW renewable goal under the Paris commitments.
• Cost Competitiveness of Solar Power: The per-unit cost of solar energy fell below that of coal in 2017, making it an economically viable and attractive alternative for businesses.
  Eg: Solar tariffs in India have dropped to around ₹2.5 per kWh, among the lowest globally.
• Expansion in Domestic Manufacturing Capacity:Government incentives and private investment have raised solar module capacity from 2 GW in 2014 to nearly 100 GW in 2025.
• International Partnerships and Market Expansion: India’s leadership in the ISA fosters global solar cooperation, especially with Africa, boosting energy diplomacy and export potential.
  Eg: India’s move to become a solar supplier to African nations under ISA strengthens market diversification.
• Technological and Rural Integration Efforts: Initiatives like PM Kusum (for rural solar irrigation) and PM Surya Ghar (for rooftop solar adoption) aim to decentralise solar access and build domestic demand.

Policy, Infrastructural, and Financial Hurdles

Policy Hurdles

• Inconsistent Implementation of Schemes: Delays and uneven execution of policies like PM Kusum have limited their effectiveness in creating rural solar infrastructure.
• Trade and Tariff Volatility: High import duties on solar components raise input costs, while unclear export policies limit competitiveness in global markets.

Infrastructural Hurdles

• Grid Integration and Storage Limitations: Weak grid infrastructure and inadequate energy storage capacity hinder large-scale renewable integration.
• Land and Transmission Constraints: Acquiring land for solar parks and ensuring last-mile connectivity remain major logistical challenges.

Financial Hurdles

• Limited Access to Low-Cost Finance: High financing costs and limited credit availability deter small and medium players in solar manufacturing.
• Price Disadvantage Against Imports: Domestic modules cost 1.5–2 times more than Chinese ones, reducing export competitiveness and profit margins.

Way Forward

• Enhance Domestic Competitiveness: Strengthen supply chains, scale up polysilicon and wafer manufacturing, and promote R&D to reduce cost gaps with China.
• Reform Policy and Finance Frameworks: Simplify project approvals, offer interest subventions, and expand green bonds and sovereign guarantees for renewable projects.
• Expand Global Market Integration: Use the International Solar Alliance to build markets in Africa, Latin America, and Southeast Asia for Indian solar exports.
• Improve Infrastructure and Storage: Invest in grid modernisation, hybrid renewable systems, and indigenous battery technology to ensure stable power delivery.
• Foster Inclusive Solar Adoption: Accelerate rooftop and rural solar schemes to create domestic demand while linking renewable energy expansion with employment and sustainability goals.

Conclusion

India’s solar sector can drive clean growth by bridging the gap between ambition and execution through stable policy, financial innovation, and modern infrastructure, paving the way for energy security and global renewable leadership.

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